Mortgage inventories, cash flow, contracts, intellectual property, trademarks, among others, can be used as an alternative option to traditional collateral on real estate.
Monday, May 5, 2014
Additionally, the law passed by the Legislature on April 30, also allows for current assets or rights given in contracts, equipment, accounts receivable, chattels, crops, tourist bookings and even future rights to the value of timber to be taken into account. The bill is awaiting the signature of the President of the Republic, and subsequent publication, and the issue of the relevant regulations by the General Superintendence of Financial Entities (SUGEF).
"Mayi Antillon, Head of the Ministry of Economy, Trade and Industry, MEIC, explained that 'the next step is preparing the publication of directories and valuation parameters of all possible guarantees ... The next step will be the creation of a System of Security Interest in the National Register, where creditors must go to register the collateral tp be put up against the certificates'"
"... This type of guarantee system is already in place in other countries and is used to provide access to credit for small businesses or those which, by their nature or line of business, lack an important basis of collateral, for example, firms engaged in production of software. "
The new law on security interests promises small and medium-sized companies quick access to credit lines, as it simplifies procedures for constituting and executing guarantees.
Last week the Congress of the Republic,approved amendments to the Law on Secured Transactionsthat has existed since 2007 to facilitate access to bank loans. With the modifications, any transaction that has the effect of guaranteeing an obligation of the debtor with the creditor is typified as a security interest.
In Guatemala, companies will now have the option of accessing financing using their inventory, agricultural products, machinery, equipment and other assets as collateral.
The Congress of the Republic approved the reforms toDecree 51-2007, on the Law on Secured Transactions, which aims to regulate security interests in loans, non-monetary obligations, credit titles and titles representing merchandise, among other things. The changes will take effect one month after they are published in the newspaper Diario de Centroamérica.
The law passed by the Legislature allows companies to use their personal property as collateral to take out productive loans.
From a statement issued by the National Assembly of Nicaragua:
During the plenary session on October 5, the National Assembly approved in general the Secured Transactions Law, a legal instrument to promote access to credit for micro, small and medium enterprises by putting up any movable goods used in their daily work as collateral.
The definition of the conditions and requirements for customers will be the responsibility of each entity, as determined in its policies and risk analysis.
The National Council of Financial System Supervision (CONASSIF) approved from Tuesday, 15 to 10 changes to the standard established by the Superintendent of Financial Institutions (SUGEF) under the Regulation for qualifying borrowers with resources granted by the Banking System Development Act 8634, which states: "It is the responsibility of the Board of Directors or equivalent governing body of each financial institution, to approve the policies, processes and controls which will be used to identify, measure and manage the risks associated with credit operations, and resources granted by the Banking System Development Act 8634 ".
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